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A dilemma facing mining consultants in West Africa

Travel restrictions due to the COVID-19 pandemic are going to make it difficult for West African mines to use expatriates as competent persons (CPs) or qualified persons (QPs) to sign off mineral resource and reserve estimates.

Might the lockdown help the region’s efforts to promote local procurement of these services?

This article first appeared in Mining Review Africa Issue 9, 2020
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Four of the top five largest gold miners by production in 2019 have footprints in West Africa. I refer to these four as the mining ‘BANK’ of the region – Barrick, AngloGold Ashanti, Newmont and Kinross – because the footprint of their combined mineral assets is substantial relative to that of their competitors.

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Together with mid-tier and junior miners, the BANK companies dominate mining in the region, with strong footprints in Ghana, Côte d’Ivoire, Mali, Burkina Faso and Guinea.

Notably, BANK companies are not indigenous, and neither are the mid-tier players. In the last decade, however, there has been an increase in legislative instruments that bind prospecting and mining permit holders to increase their local content.

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Some regulations encourage miners to make use of raw materials sourced locally, where these are available and of the required quality.

Fewer expatriates

Localisation efforts are also aimed at key skilled personnel on mining operations. This has led to fewer expatriates operating in the region’s mining space.

The regulations attempt not only to achieve more local content; they also hope to encourage skills transfer from expatriates to locals at all levels of management. They have largely been successful at mines’ operational levels, although less so for more specialised expertise.

A review of annual reports of most miners indicates the use of independent and foreign mining consultants as CPs and QPs to sign off on mineral resource and mineral reserve (MRMR) estimates.

In the case of BANK, where they have made use of in-house CPs, there is a tendency to seek third party assurances from this category of consultants.

This is to complement the statements they have issued or to verify the appropriateness of the internal processes they have followed in the declaration of their MRMR statements.

Not many local consultancies

Rarely have any of these miners engaged locally-based consultants as CPs or QPs for their MRMR estimates, for a couple of reasons. Key among them is the virtual non-existence of local consultancy firms that meet the reputational standards of these companies, their investors and the stock exchanges where they are listed.

This should definitely be a concern for proponents of localisation. The history of mining in Ghana, for instance, spans almost the same duration as mining in South Africa; however, the availability and quality of consultants from these two countries do not compare – at least in terms of the mining sector.

In Ghana – currently the number one gold producer in Africa – emerging local consultants are mostly skilled personnel who have retired from either the BANK or mid-tier miners. They are seeking ways to gain a fair share of the consultancy cake which remains dominated by foreign firms.

To be successful, local consultants usually collaborate with the big brands dominating the region; alternatively, they lobby law makers to increase local content requirements through legislation.

A win-win situation is more likely with the former option. The latter option, which relies on legal pressure, will impact negatively on the profitability of the foreign consultancy firms – but will also create other hurdles for attracting investment.

What is required is a careful balancing act between the national interest of West African countries, their ability to attract mining investment, and the expectations of miners and their shareholders regarding technical competency and standards.

Ghana will be a test case and, depending on how the pendulum swings, will affect how other mining countries in the region proceed.

Pandemic could boost collaboration

COVID-19 and its impact on international air travel has added another dimension to this equation, putting more impetus behind the collaboration option.

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The longer these restrictions are in place, the more they will erode the financial revenue of foreign consultancy firms working in the region. Their usual modus operandi is to fly into the region for site visits, then revert to base and issue a report from there.

The reason why big brand consultancy firms have not set up remote offices in the region is primarily to do with the lack of a guaranteed revenue stream to offset the costs of paying for salaries, skills development and overheads.

Contractual agreements between miners and consulting firms are usually on a short-term basis with no guarantee for future work; this uncertainty underpins the fly-in, fly-out approach.

Solutions beyond 2020

The restriction of movement across national borders is likely to remain intact for as long as a vaccine for COVID-19 is unavailable. Furthermore, any easing of these restrictions will still require days of isolation or quarantine, which add to the cost of doing business across borders.

The role of CPs and QPs in certain types of technical studies usually includes site visits. The international codes for Reporting of Exploration Results, Mineral Resources and Mineral Reserves certainly require these kinds of visits – unless exceptional circumstances prevail, which must be disclosed. It is anticipated that technical reports are in future likely to include caveats such as: “due to the lockdown restriction, a site visit was not undertaken”.

It is too early to tell if this kind of caveat will be accepted by stock exchanges and regulators, especially if material flaws associated with technical studies are found to be directly linked with a CP or QP not familiarising themselves adequately with the site conditions on the ground.

This will be a period of navigating uncharted waters, and it poses real concerns if borders remain closed.

Our experience in the region suggests that large consultancies are now facing an important decision regarding their ongoing presence in the West African region. In the aftermath of the 2008 global recession, SRK established our Ghana office in 2011.

This office was strategically positioned to mainly provide geotechnical and geological services to the mining industry in West Africa. We anticipate that the easing of border restrictions within the region will lead to an uptick in workload. Those big brands that take a step of ‘faith’ by investing in a local presence are bound to witness a harvest season if COVID-19 persists.

SRK certainly sees a valuable symbiosis between strong consultancy services that are located in-country and the ongoing needs of mining companies operating there. Access to high-quality, independent technical studies is a vital aspect of sustaining a firm foundation for the region’s mining sector.


Ivan Doku has experience in the application of sound quality assurance and quality control in geological measurements. He is an expert in geological modelling, mineral resource estimation of precious/base metals and industrial minerals.

He has undertaken several due diligence audits and technical studies of mineral assets across the African continent. His mining experience spans a period of 13 years. Doku holds a GDE (Mining) & MSc Eng from Wits University and BSc Eng (Geological) from the Kwame Nkrumah University of Science Technology.

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